As CNBC reported recently, large US cities are facing a huge shortfall of unfunded public pensions, to the tune of roughly $574 billion. That’s in addition to the estimated $3 trillion gap in state-funded pensions, and it comes at a time of already rapidly declining tax revenue due to a recession attributable to rapacious government spending, at all levels, in the first place. Furthermore, that recession is likely to get much worse according to eighteen leading hedge fund managers who recently published a book of essays, “The Gathering Storm”, in which they allege that the world economy is more or less — well, doomed.
One need not be particularly pessimistic to surmise that if conventional politics was capable of solving this problem, it would have done so already. Rather, it’s up to America’s organs of non-governmental civil society to see it through this public pension crisis and the larger, ongoing, Soviet-style economic meltdown. Specifically, public employee unions can take the lead in a new approach to the problem, marshaling public support for it in order to make government back down where it acts as an obstacle.
Government, at all levels, is bankrupting itself and taking the rest of the country (nay, world) with it. An equity for debt swap is relatively common in bankruptcy cases. In this case, unions can serve as advocates and midwives for a new model of worker-owned privatization that gives rank and file public employees shares of common stock in formerly public enterprises as compensation for the default on pensions that’s inevitably coming, whether they want it to or not.